SE tax on net income
Submitted by lowly5 on Sun, 2008-08-03 17:50.
Linda,
In an earlier thread you mentioned to me that SE taxes must be paid on net income. Is that net LLC income or net personal income period. For example if I maked $70k in a day to day job and $10k through my SMLLC am I paying SE tax on the $10k or the $70k?
Thanks!
Jay
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SE Tax on Business Net Income
Hi Jay,
You only pay the SE tax on your net income from the LLC. The net income is calculated on your Schedule C. The net income flows to Schedule SE. That form calculates the SE tax.
In your example you only pay SE tax on the $10K of business income from the LLC.
Hope this helps!
L:)